The SEC continues a strict policy regarding tokenized stocks, keeping them within the framework of existing securities laws.
SEC's Position on Tokenized Stocks
SEC Commissioner Hester Peirce noted that tokenized stocks must adhere to current regulations. According to her, these instruments, despite their innovation, are not exempt from existing laws.
Risks and Control of Tokens
Tokenized stocks are traded on specialized platforms, aiming to match the price of real stocks. However, investors are actually buying tokens rather than actual company shares. These tokens are controlled by the platforms, which assert that their value equals real stocks. Peirce highlighted risks for investors, including potential hacking threats that could disrupt the link between a token and the actual stock.
Next Steps for Crypto Companies
Companies like Robinhood and Coinbase seek SEC approval to offer tokenized stocks. Robinhood has already sent a letter requesting consideration of the possible advantages of this initiative. Peirce expressed her views, but did not state an official SEC position. Coinbase aims to leverage crypto technology for stock trading, acknowledging the risks associated with the tokenized model.
Thus, the SEC's position on tokenized stocks remains clear: despite the advancement of technology, these instruments are subject to existing rules, posing certain risks for both investors and crypto companies.
